Autos: When a repair shop installs a faulty part..

So I just had a radiator replaced. Turns out the new radiator is faulty as it is leaking trany fluid. I’m taking it back to the shop tomorrow to have it replaced at their expense.

I’m just curious if the repair shop can now go back to the manufacturer and claim they now owe them a working radiator and labor costs of replacing the radiator?

Generally, no, the manufacturer will only pay for the faulty radiator. This is one reason most auto shops will only use parts they source (ie, they don’t like to install customer supplied parts). They source the parts from reputable suppliers and the chances of getting a bad one is reduced.

Radiators are usually very easy to replace, so the shop would probably just eat the labor, probably accounting it as a warranty repair to take off their taxes.

It depends. With some parts/vendors labor is covered. Others it isn’t.
Shops not wanting to install customer supplied parts also gets into liability issues as well as lost profit.

No it’s not. There are a number of reasons why it’s wise for a shop to refuse to use customer-installed parts, but this isn’t one of them.

If a shop installs a customer-supplied part the shop assumes no responsibility for it being defective. The customer probably has a warranty for the part itself, from wherever he bought it, but of course he has to present the defective part to use that warranty. Which means he gets to pay the shop’s labor again, for the shop to do the replacement again. The shop may guarantee its labor against faulty workmanship, but no way in hell is the shop going to offer a labor guarantee against a part it didn’t sell in the first place. This is one reason it’s wise for the customer to have the shop provide both parts and labor, in which case the shop will guarantee the labor for a defective part.

Actually Gary there have been a few court cases where the judge held that the shop was the professional, and if the customer supplied part was not of the proper quality that that is just too bad, the shop as professionals assumed the liability and responsibility when they installed an inferior part.
I also know of a case where a dealership allowed a customer to supply a junkyard trans. They installed it. It went bad the next week.
Junkyard supplied a second trans, customer paid labor a second time.
You guessed it this one lasted about two weeks.
Junkyard supplied a third trans at no charge. Customer balked at paying a third labor charge and went to the LA Times. Dealer gets their reputation trashed due to low quality customer supplied part.
Sorry, but at my dealership the only customer supplied part I will install is one the customer bought from us and then decided that they were in over their head.
Bought it from the outside? Sorry, but no can do.

The radiator is leaking transmission fluid?

Most cars with automatic transmissions have a transmission fluid cooler built into the radiator. The tranny fluid and engine coolant don’t mix, but it’s a convenient way to cool down the tranny fluid. Note that it’s using a ~200ºF environment to do that, which gives you an idea of how hot tranny fluid gets.